The stock actually ended the regular trading day higher, but
shares are still struggling in a difficult market for newly public
Internet companies. Groupon shares are down almost 75% from their
November IPO, and off nearly 65% in 2012 alone.

Executives faced analysts' questions on a post-earnings conference
call, and as expected, the first was about how the company accounts for
its relatively new product-sales business Groupon Goods.

Groupon records Goods revenue on a gross basis. For its other
businesses, like coupons, Groupon accounts for them on a net basis --
that is, it strips out the money that it hands over to the merchant
offering the deal.

Sterne Agee analyst Arvind Bhatia said in a note last Wednesday
that he thinks the Goods accounting is "appropriate," but when mixed
with other sectors of the business it appears to be "artificially
boosting revenue growth." Other analysts echoed that concern.

On the call, executives explained that Goods falls under Groupon's
"direct revenue" sector -- in addition to a handful of specific daily
deals like travel vouchers and movie tickets. Direct revenue totaled
$65.4 million this quarter, compared with $19.2 million in the first
quarter.

Groupon founder and CEO Andrew Mason talked up the success of
Goods, saying it's indicative of "the power of the consumer brand we've
built through our local business deals."

Meanwhile, the company's outlook for the third quarter came in
line with analysts' expectations. Revenue is expected to be between $580
million and $620 million, and operating income is predicted to be
between $15 million and $35 million.

This year has been a rough one for the new crop of public Internet companies, particularly Facebook(FB), whose stock has fallen by nearly half since its problem-riddenMay IPO. But Groupon isn't the worst off. Shares of FarmVille maker Zynga(ZNGA) are below the $3 mark.

One notable exception to the Internet slump is LinkedIn(LNKD), whose shares are up about 65% this year. The business networking site reported strong second-quarter earnings earlier this month.